April 25, 2024

DealBook: ConvaTec Said to Bid for Kinetic Concepts

ConvaTec, a company owned by two private equity firms, has made a bid for Kinetic Concepts that is higher than the wound-healing technology company’s $4.9 billion deal with another group of investors, a person briefed on the matter told DealBook on Sunday.

ConvaTec, which is owned by Avista Capital Partners and Nordic Capital, has obtained “highly confident” financing letters from Goldman Sachs and the Jefferies Group. Such correspondence means that while ConvaTec has not secured formal lending commitments, its investment banks believe that they can arrange the necessary debt financing.

Kinetic Concepts agreed last month to sell itself to a group of investors led by Apax Partners in the largest leveraged buyout since the financial crisis. Apax, along with the pension funds Canada Pension Plan Investment Board and the Public Sector Pension Investment Board, agreed to pay $68.50 a share in cash. Including Kinetic Concepts’ debt, the deal is valued at $6.3 billion.

Under the terms of Kinetic Concepts’ agreement with the Apax consortium, it could “initiate, solicit and encourage” higher bids until 11:59 p.m. on Sunday. Should the company strike a deal that its board determines is superior to the Apax offer, it will have to pay that group a $51.8 million breakup fee.

The bid by Convatec is unusual because private equity firms generally shun “jumping” bids once a deal is announced.

One possible complication for Convatec is unease about the financing markets, which have grown more volatile during the recent market turmoil. At least one potential transaction, Liberty Media’s proposed takeover of Barnes Noble, was scuttled because of rising financing costs. Liberty instead decided to buy a 16.6 percent stake in the bookseller for $204 million.

Kinetic Concepts has long been seen as an attractive takeover target because of its market-leading position in negative-pressure therapy, a technology that uses vacuum pumps to treat wounds. In recent years, however, lower-priced competitors have cut into the company’s market share.

Because of its relatively stable revenue, the wound-care industry has drawn the interest of private equity firms in recent years. Avista and Nordic bought ConvaTec from Bristol-Myers Squibb in 2008, in what was the largest leveraged buyout that year.

Shares in Kinetic Concepts closed on Friday at $65.37.

News of Convatec’s offer was reported earlier by Bloomberg News.

Article source: http://feeds.nytimes.com/click.phdo?i=ba3b1794d1b9530968e3bcb9e1d31569

The Boss: Ballrooms and Boardrooms

My parents always dreamed that I would be a teacher, and so did I. From very early on, I did well in school; I was the valedictorian of my high school class, vice president of the student body, president of the math club and editor of the school paper.

I majored in math and classical languages at Canisius College in Buffalo. I received my master’s degree and started working toward my Ph.D. at the University of Buffalo. But then Kodak came in and started interviewing. I was hired as a software engineer, doing programming, and left graduate school. Within three years, I was promoted to supervisor and then advanced to senior levels of management.

Along the way, I became involved in educating people about leadership. Early on, I tried to understand what it takes to get people to follow you. How do you create a vision, and how do you inspire an organization? I learned how to motivate a diverse team of people and how to encourage it to go after a mission.

You don’t learn those skills in college. I think you learn by doing and you learn by having some great role models. I have been fortunate to have people who helped me build those skills. I’m close friends with my first boss at Kodak, John Gallenberger, along with my last boss there 20 years later, Carl Kohrt, who now serves on the board of my company, Kinetic Concepts.

I made a decision in 1988 that I wanted to put technology to use in health care; I wanted to do something that helps patients. I was recruited to Johnson Johnson in the late 1990s and ran two of its businesses — first in Tampa, Fla., then in Raritan, N.J.

Johnson Johnson is smack in the middle of health care, which is exactly what I wanted to do. It’s the same at KCI, where I’ve been the chief executive for about five years. We provide, among other things, regenerative medicine products and high-end wound healing products that use a technology called negative pressure wound therapy to remove infection, thus speeding the healing process.

I’ve been married to Frank Burzik, my high school sweetheart, for 40 years. We met while roller-skating when I was about 13. We have always liked to dance socially; we used to go to the Rainbow Room in Manhattan. We now go ballroom dancing together. In fact, we just built a house with a ballroom in it.

Ballroom dancing can teach you a lot about both life and business. You can dance well only if you’re connected; you learn the power of the partnership. I have to be so unbelievably connected, myself as the follower and my partner as leader. I have to intuit in fractions of seconds how to respond to a lead. So you learn to read a person’s mind.

I talk to my people at work about ballroom dance, about how to be connected, and to be aware of musicality. In a business sense, this means learning a three-dimensional presentation of yourself that allows you to understand how to harmonize with others in the organization, as well as with customers and patients. It gives you the insight and intuition to anticipate and take initiative quickly, and then to follow through in an informed way.

Once or twice a year, I invite my leadership committee members and their spouses over to my house and we dance. And they’ve turned out to like it. A few are even taking ballroom dance lessons now. I like to think it’s my influence.

As told to Abby Ellin.

Article source: http://feeds.nytimes.com/click.phdo?i=ccb54c261b70f3fd9b4a646d504d34b0